Although most people think they understand the concept of employment at will, many people actually misunderstand what employment at will really means. First of all, it is important to understand that the concept of employment at will also encompasses the concept of termination at will. Both employment at will and termination at will is the general law in all states except for Montana.
The concept of employment at will embodies three essential elements. First, it means that employers can dismiss an employee at any time and no cause is needed. Second, it means that an employee can leave his or her position at any time with or without reason, without suffering any legal consequence. Third, it also encompasses the principle that an employer can change the essential terms of an employee's employment contract without notice or consequences. These changes can include wage decreases, a reduction of paid time off, a termination of benefits, schedule changes, etc.
Employment at will does not mean, however, that no dismissal can ever legally constitute wrongful dismissal. Wrongful termination can occur, even in situations where employment at will governs, if an employer terminates an employee for an illegal reason. Even though an employer can terminate an employee without cause in an employment at will situation, there are certain reasons for termination that are illegal: sex, religion, national origin, disability, etc.
Another situation where wrongful termination can exist is in employment where there is a contract that deviates from the employment at will presumption. If a contract stipulates a specific term of employment or states that termination is only permissible when there is a cause, a breach of these legal provisions could also constitute wrongful termination. These kinds of agreements are typically made between employers and high-level employees, as well as with groups of employees that have collective bargaining agreements.
Source: NCSL.org, "The At-Will Presumption and Exceptions to the Rule," accessed on Feb. 15, 2015